This archive report was first published on 22 November 2019.
Kenya Revenue Authority (KRA) has launched a major crackdown on illicit trade and contraband in the country, with the rollout of the Excisable Goods Management System (EGMS) on bottled water, juices, energy drinks, and soda.
EGMS, which was first introduced in 2013 on tobacco, wines, spirits, and beers, has been successful in improving revenue collection in the sector. According to KRA, the system has helped to increase excise revenues from Ksh700 million to over Ksh5.7 billion per month.
The implementation of EGMS has also made it easier for KRA to identify and interdict illicit products along the supply chain. This has led to the destruction of excisable goods worth over Ksh1.5 billion, with a revenue implication of over Ksh400 million.
With the extension of EGMS to soft drinks and other non-alcoholic beverages, KRA is confident that the system will help to bridge the gap between those who have been paying taxes and those who have not. The water sector, for instance, has a wide gap, with about 78% of players not paying their fair share of tax.
According to Elizabeth Meyo, Commissioner for Domestic Taxes Department at KRA, the rollout of EGMS will help to guard the market from potentially harmful products that pose serious health hazards to unsuspecting consumers. It will also help to prevent the proliferation of illicit trade and contraband, which is the breeding ground for other serious vices such as crime and money laundering.
As KRA continues to fight against illicit trade and contraband, it is calling on all stakeholders to support the implementation of EGMS. This includes manufacturers, distributors, and consumers, who must work together to ensure that the system is successful.
